Needle of suspicion on the appointment of consultancy firm for expansion

THIRUVANANTHAPURAM:
Leader of the Opposition V. S. Achuthanandan has sought a probe by an Assembly committee into what he termed corruption in public sector Kerala Minerals and Metals Limited (KMML).

In a statement here on Thursday, Mr. Achuthanandan said the Comptroller and Auditor General's finding that the company, which had topped the profit-making public sector companies in the State for years now, had incurred a loss of the order of Rs.358.59 crores till March 31, 2004, was a proof that the corruption charges against the company management were true.

Mr. Achuthanandan said his information was that corruption struck deep roots in the company with the appointment of Mecon as the consultancy for its expansion. The consultancy firm was involved not only in providing advice to the management, but also in floating tenders for procurement of equipment, their evaluation and quality control. Although Mecon was a Central public sector undertaking, some `mysterious forces' were alleged to be working behind it, he said.

The Opposition Leader said there were allegations that the consultancy contract was awarded to Mecon inappropriately after rejecting bids from two other public sector undertakings. He also alleged a foul play involving the KMML management and those working behind Mecon and said the tender notifications were being doctored to ensure that firms that were in the good books of Mecon got contracts. The State PSU was losing crores of rupees in the process, he added.

Mr. Achuthanandan said the company had sustained a loss of Rs.30 crores on account of its decision to award the contract for setting up a desalination plant to Doshi Iron Exchange. The KMML had rejected this company's bid in the preliminary round. However, following intervention by Mecon, it was awarded the contract rejecting bids from companies such as Bharat Heavy Electricals Limited (BHEL). Although the cost of setting up the desalination plant would come to only Rs.20 crores, the KMML would have to spend Rs.50 crores by the time the plant being up by the Doshi Iron Exchange is commissioned.

The Opposition Leader also alleged that most of the construction work at the KMML was being cornered by a `secret gang' who functions under the title Grintex, KPML and Trafalgar. He said there were also allegations that the Industries Minister's office and a Muslim League MP, who was also a former member of the KMML director board, were behind all this.

Pointing out that a massive recruitment drive was on at the KMML, Mr. Achuthanandan alleged that each post was being filled taking amounts ranging from Rs.5 to Rs.15 lakhs as bribe. The widespread allegation, he said, was that middlemen operating out of the offices of the Industries Minister and the Labour Minister were behind this. Since all these would land the company into a deep crisis, the Government should immediately facilitate an inquiry by an Assembly panel into the goings-on at the KMML, the Opposition Leader said.